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OCC rescinds CRA guidance for large banks, issues numerous clarifications


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According to Market Intelligence, April 2023

OCC rescinds CRA guidance for large banks, issues numerous clarifications

The Office of the Comptroller of the Currency on June 15 rescinded guidance for how examiners should evaluate fair lending practices at large banks.

The rescission, effective June 1, came in an announcement that included various policy clarifications for all banks to the Community Reinvestment Act, a 1977 law that governs fair lending and branching practices. OCC spokesman Bryan Hubbard said the guidance was part of the regulator's regular updates to CRA. He also said the guidance was not an interagency action, meaning it will only apply to OCC-regulated banks.

Beyond the rescission of guidance for large banks, which had been issued in December 2000, some items that stood out included a change to the evaluation period for retail and community development activities. That evaluation period has been expanded to three full calendar years for small and intermediate banks.

The clarifications, which are effective immediately, also mentioned mortgage loans, use of demographic data, loans outside of a bank's assessment area and evaluation frequency and timing. On timing, the guidance mentioned there could be a short-term delay in a CRA evaluation based on specific circumstances such as the timing of bank data reporting. In the mortgage space, the guidance mentioned examiners should consider all types of home mortgage loans in evaluations.

The guidance mentioned activities that promote economic development could include loans that preserve jobs in low- or moderate-income areas.

"The OCC considers a loan, investment, or service as helping to retain jobs if a bank can demonstrate that the jobs retained were at risk of loss," the guidance read.